Statutory limitation on reassessment barred late proceedings where the first notice was issued after the five-year period expired.

Reassessment under Section 25A of the Kerala Value Added Tax Act was held to be barred where proceedings were initiated after the five-year limitation period from the end of the assessment year. The Court noted that limitation expired on 31.03.2015, while the first notice was issued only on 31.10.2015, and the record did not show timely initiation on the basis of any audit objection. Mere detection of an offence was insufficient to extend the statutory period. The reassessment proceedings were therefore liable to be set aside, and the assessment order was quashed in favour of the assessee.

---

---

Issues: Whether reassessment proceedings initiated beyond five years from the end of the assessment year were barred by limitation under Section 25A of the Kerala Value Added Tax Act, 2003.

Analysis: Section 25A provides a five-year limitation for reopening of assessment, and the provision has been interpreted to require initiation of proceedings within that period. On the facts, the limitation expired on 31.03.2015, while the first notice was issued on 31.10.2015. The notice did not refer to any audit objection, and the record did not show that the proceedings were initiated within time on that basis. Mere detection of an offence was insufficient to extend the limitation.

Conclusion: The reassessment proceedings were initiated beyond the limitation period and were liable to be set aside. The assessment order was quashed, in favour of the assessee.

Ratio Decidendi: Where reopening of assessment is subject to a statutory limitation period, the proceedings must be initiated within that period and cannot be sustained if the first notice is issued after limitation expires.

---